If School Funding Formula Sticks, Alexander Talks Of Possible Need For Levy

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The state’s new funding formula and other projections indicate Alexander Local Schools may face deficit spending by fiscal year 2018. And because so much of the district’s funding is now considered “guaranteed,” school officials said something will need to be done to increase school revenue.

District Treasurer Aaron Schirm, who presented the latest five-year forecast during Wednesday’s meeting, said the situation isn’t urgent, but at some point the district will either need to increase revenue or cut expenditures. Because the district already is at staffing minimums, he said increasing revenue is their only option.

“It is still too soon to say even a specific date that something needs to be done, due to the fact that the state only releases two-year budgets,” he said, via email. “Things could change significantly from one biennial budget to the next, as it has in the past.”

The current formula is the fourth system created since fiscal year 2008.

Schirm’s main concern with the “guaranteed” funds is that the governor has said he would like to phase them out. The district is slated to receive $1.3 million in guaranteed funds. This means the new school funding formula indicates the district should be receiving $1.3 million less. Because districts were promised not to receive any less funding from last year, the district is getting that extra money. The amount represents about 14 percent of the district’s total budget.

“They haven’t started (phasing it out), but if they do, it’s a concern, considering we’re so far onto it,” Schirm added. “Only a handful of districts are in as deep as Alexander. I can’t figure out why. We’re not a high-wealth district.”

He thinks it might be because the district has a large percentage of farmland, which might be perceived as wealth because agricultural values have increased.

The district’s other major source of funding is property tax. Alexander is located within three counties from which it receives property tax revenue. The majority is in Athens County, the rest is made up of small portions of Meigs and Vinton Counties. Property tax revenues are expected to increase slightly.

Total revenues are projected to bring in about $100,000 every year, but Schirm said that’s not enough to keep up with inflation and other increased costs.

“The good news is that we have enough cash balance to have time to decide what to do, but the fact is, something needs to be done,” he said. “It’s just a matter of what year.”

Board members have asked Schirm to present to the board next month estimates for an income tax levy, an earned income levy and a permanent improvement levy. The next board meeting is scheduled for Wednesday, Nov. 20, at 7 p.m.